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07 August 2012

7th August,
Tuesday

Residential

Second-timers on the prowl

Source: Today

Even as the Government shifts its
focus on meeting the housing needs of second-timers, the number of such
applicants has crept up - after a sharp downward trend in recent months - based
on figures from the latest Build-to-Order (BTO) exercise.

Application for the 4,200 units on
offer closed Monday. As at 5pm Monday, the application rate of second-timers -
who are mostly upgraders, according to property analysts - was 11.4 while that
of first-timers stood at 1.7.

While property analysts said the
higher second-timer application rates were not a cause for concern - given the
attractive locations of some of the BTO projects - some believe tweaks are
imminent to allocate more BTO flats to second-timers.

An analyst said he expects the
allocation for second-timers in non-mature estates to be increased to between
20 and 25 per cent, while another analyst suggested increasing the proportion
further, to 30 per cent.

For mature estates, they felt the
increase, if any, would be marginal to 15 per cent.

On the latest application rate for
second-timers, analysts noted the attractiveness of the locations of the BTO
projects, particularly those in the mature estates. In particular, the projects
at Bukit Merah and Clementi would be popular with upgraders despite being
relatively pricier.

Noting that there have been few new
BTO projects in these two estates, DWG Research and Consultancy Senior Manager
Lee Sze Teck said: "Unlike first-timers whose main concern would be the
affordability ... second-timers are looking for what they need and usually it
is bigger units for their bigger families."

One analyst noted that ultimately, a
balance has to be struck between meeting the needs of young couples and
families looking to upgrade. He said: "I do not think there is any way to
ease the demand by second-timers ... the Government will have to decide how to
distribute scarce resources."

As the race for Primary 1 places
heats up, allegations of parents "renting" their way to coveted spots
in popular schools have resurfaced.

Applicants who live near the schools
stand a better chance of snagging places during balloting.

In response to queries from The
Straits Times, the Ministry of Education (MOE) said children who gain entry
into schools through distance priority should be living "in the address
used for registration during their primary school education".

As for whether pupils have to reside
at the same address for all six years of their primary education, an MOE spokesman
said it will assess instances on a case-by-case basis.

There are very few proven cases of
parents who use false addresses, said the spokesman. But any parent found to
have done so will be referred to the police for investigation, and the child
transferred to another school.

Schools said cases of parents trying
to circumvent the rules on addresses are rare, as they would not want to risk
their children being expelled.

Besides, the intention of parents who
rent and move out shortly after cannot be determined for sure, said a principal
of a popular primary school in the north.

He said: "Even if they move out
when the child is in the middle of Primary 1, or even just as he starts Primary
1, there is no way to determine that the parents' intention was to get a place
in the school." It could be due to other reasons, such as not being able
to pay the rent, he added.

An analyst noted that leasing on a
short-term basis is still uncommon as tenants would usually have to sign a
lease of at least a year.

Besides if the family moves away
after the lease is up, it will also be hard on the child, who would have to
wake up earlier and travel a longer distance to get to school, said a parent.

While a 50-year home loan helps ease
the cash flow for young couples, the interest paid on it will eventually reduce
the potential profit that can be made on a property, said most financial
advisers Monday.

Such long-term loans, with their
lower monthly payments, may also lure couples to spend beyond their means in
the meantime, they added.

What they should do when starting out
is to buy a smaller flat within their means and upgrade later when they can
afford it.

They are coming up with new designs
and lifestyle themes for their developments to differentiate their projects
amid the growing competition.

From waterfront units to condominiums
designed by renowned architects, and more recently, 'sports-themed' apartments,
developers are chasing new lifestyle concepts to draw home buyers to their door
- and it looks like it is working.

Experts said developers' move towards
creativity and differentiation has little to do with the declining number of
housing units sold.

Analysts said constructing themes
like these will help developers get the 'first cut' of sales amidst this flood
of property options in the market.

While this trend is not new, themed
projects are likely to be more prevalent in the near future.

A 60-year leasehold industrial
property was put up for an expressions-of-interest exercise Monday.

Occupying a total land area of around
44,906 sq ft, the site along Lorong 5 Toa Payoh comprises a four-storey light
industrial building with a gross floor area and net lettable area of about
83,342 sq ft and 58,194 sq ft, respectively, at an indicative asking price of
about $23 million to $25 million.

Zoned "Business 1"
according to the Master Plan 2008, the site, which is a stone's throw from Toa
Payoh Central (where the Toa Payoh MRT station and the bus interchange are
located), has a plot ratio of 2.5 which translates into an allowable gross
floor area of around 112,265 sq ft.

The rising number of investors
flipping their industrial units for a profit has caught the eye of the
Government.

It has warned that fresh measures
might be introduced if prices do not moderate.

A Ministry of Trade and Industry
spokesman told The Straits Times it has observed a "rising incidence of
short-term flipping in the industrial property market in tandem with rising
prices".

The once-unglamorous industrial
segment has hogged headlines in recent months as prices and rents continued to
defy gravity, raising concerns that the sector is getting a bit too frothy.

Prices of factory and warehouse space
have rocketed about 16 per cent in the first half of this year while rents for
these properties are up by about 5 per cent.

This has been partly attributed to
the investors diverted into the industrial segment on the back of residential
cooling measures introduced since September 2009.

But an analyst cautioned that as
prices rise, so do downside risks, especially in times of economic uncertainty.
"There are some agents in the market who are also using the fact that
there is no seller's stamp duty for industrial units to market them to
investors as well."